US focuses solar heat on China

Seven US solar panel makers have filed a broad trade case in Washington against the Chinese solar panel industry, accusing it of using billions of dollars in government subsidies to help gain sales in the US market. The companies also accuse China of “dumping" solar panels in the US for less than it costs to manufacture and ship them.

The trade case, filed at the Commerce Department on Wednesday, seeks tariffs of more than 100 per cent of the wholesale import price of solar panels from China. Imports of Chinese solar panels to the US totalled $US1.6 billion in the first eight months of this year.

The filing, which the Commerce Department has no choice but to review, under federal rules, comes as anti-China sentiment is running high in some Washington corridors.

The Senate recently passed a bill that would require the Treasury Department to order the Commerce Department to impose tough tariffs on certain Chinese goods if Treasury found that China was improperly valuing its currency to gain an economic advantage. So far, Republicans have declined to bring the House of Representatives version up for a vote.

The matter will probably be controversial within the US, too. For one thing, if successful it would drive up the cost of solar energy in the name of keeping the US industry competitive.

The case also coincides with criticism by congressional Republicans of the Obama administration’s efforts to support US clean-energy companies. Republicans argue that federal loan guarantees of more than $US500 million to the now-bankrupt solar company Solyndra show the folly of the administration trying to guide industrial policy in clean energy.

But two Democrat senators on Wednesday supported the trade case. “American solar operations should be rapidly expanding to keep pace with the skyrocketing demand for these products," said Senator Ron Wyden of Oregon, who appeared at a Washington news conference held by an Oregon solar panel maker, Solar World Industries America. “But that is not what has been happening. There seems to be one primary explanation for this; that is, China is cheating."

Whatever the partisan positioning, though, the trade case would procedurally begin above the political fray. It will follow a quasi-judicial path at the Commerce Department and a related US agency, the International Trade Commission, that is designed to operate without political partisanship influence. Congress created the apolitical process for trade cases during the Cold War because of a perception that Democrat and Republican administrations had tolerated subsidies and dumping by many countries as long as they were US allies against the Soviet Union.